Using candor to describe Ford's current financial situation, Mulally downplayed his meeting last month in Tokyo with Toyota's Chairman Fujio Cho by saying he's meeting with leaders from many automakers to better understand the industry and see if there are areas where the company's can work together. But, he added, Ford is not considering any specific alliances with Toyota or any other automaker.

Mulally reiterated Ford's plan to refresh 70% of the automaker's line-up by 2008 and 100% of it by the decade's end.

"I feel more confident now than when I arrived. In part because of the people in place and our plans. But we're at a critical point" said Mulally.

At this juncture, Ford is cutting 45,000 jobs. Ford had reported that U.S. December vehicle sales fell 13% from a year earlier, based on straight monthly totals, partly from lower demand for its F-Series pickup trucks. Street expectations had put Ford's sales decline at 6.5%.

With production coming down, it's likely to fall behind Toyota in U.S. sales next year. In 2006, the Japanese automaker passed Ford to become number 2 in worldwide auto sales. Mulally was candid in his praise of the Japanese automaker saying, "I'm really a fan of (Toyota's) efficient design and manufacturing."

Mulally studied Toyota's production system and incorporated its lessons while turning around Boeing commercial airplanes.

When asked about the UAW talks scheduled later this year, Mulally said, "We need to improve our competitiveness and we need to do it together."

The world will see if Ford's pipeline is more competitive when Mulally unveils the newest models and future design concepts at the Detroit auto show which starts Sunday.